After 9 consecutive quarters of explosive growth which propelled China into the top smartphone market in the world the China smartphone market experience its first slowdown in 2013 Q4.

According to the International Data Corporation (IDC) Asia/Pacific Quarterly
Mobile Phone Tracker, shipped 90.8 million units compared to 94.8 million in
2013 Q3, declining by 4.3% quarter on quarter.

Several factors drove this stumble - for one, China Mobile's 4G TD-LTE
network went live on December 18, translating into supplies of 4G handsets not
able to reach the market fully until 2014 Q1. The increasing popularity of
phablets and channel inventory also played a role, whereby operators cut phone
subsidies on phones with smaller screens, triggering distribution channels
looking to clear out those stocks.

"The world has increasingly looked to China as the powerhouse to propel the
world's smartphone growth and this is the first hiccup we've seen in an
otherwise stellar growth path," says Melissa Chau, Senior Research Manager
with IDC Asia/Pacific's Client Devices team.

"There will certainly be future drivers to unlock further smartphone growth
in China, as Apple demonstrated with its China Mobile tie-up in January, and the
massive device migration to come of phones only supporting 2G and 3G networks to
devices supporting 4G networks. However, we are now starting to see a market
that is becoming less about capturing the low-hanging fruit of first time
smartphone users and moving into the more laborious process of convincing
existing users why they should upgrade to this year's model"

Looking ahead at the prospects for the Asia/Pacific (excluding Japan) region,
with mature Asia/Pacific markets like already having hit market saturation and
China growth facing more moderate increases, two trends will become more
prominent.

First, growth will increasingly shift to ever-more emerging markets. While
India volumes significantly lag China, India has taken the number three ranking
of largest smartphone markets in the world in 2013, surpassing Japan, the United
Kingdom, South Korea, Germany and France, which were all ranked higher in 2012.

Second, Chinese phone players which have previously been content to make
their mark on the China market itself, are looking to expand their ambitions
overseas. While this trend has started already through 2013, IDC expects it to
become more common in 2014.

"Chinese players are getting hungrier to turn themselves into international
rather than China-only brands. Nowhere is this more clear than Lenovo's
acquisition of Motorola's handset business, and even smaller players, some
unknown to much of the world, like Oppo, BBK, Gionee and of course Xiaomi are
ramping up on international expansion."

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